IMF says Nigeria’s economy will contract by 1.8 per cent in 2016

19 Jul 2016
Financial Nigeria


The IMF has also cut Nigeria’s GDP growth forecast for next year from 3.5 per cent to 1.1 per cent.

Nigerian President Muhammadu Buhari

The International Monetary Fund released its World Economic Outlook on Tuesday, stating that Nigeria’s economy will contract by 1.8 per cent as the country faces challenging macroeconomic conditions.

The Washington-based multilateral institution had previously forecasted in April that Africa’s largest economy will grow by 2.3 per cent in 2016.

“In Nigeria, economic activity is now projected to contract in 2016, as the economy adjusts to foreign currency shortages as a result of lower oil receipts, low power generation, and weak investor confidence,” IMF said.

The IMF said it has also revised Nigeria’s growth forecast for next year, projecting that the economy will grow by 1.1 per cent in 2017 down from a previous forecast of 3.5 per cent.

Earlier this month, IMF’s Resident Representative in Nigeria, Gene Leon, had said Nigeria’s economic growth will pick up in the second half of the year, but not fast enough to offset the negative growth in the first and second quarters of the year.

The IMF’s 2016 growth projections for Sub Saharan Africa has also been revised to 1.6 per cent from 3 per cent in April, while 2017 projection has been cut to 3.3 per cent from 4 percent.

“Growth projections were revised down substantially in sub-Saharan Africa, reflecting challenging macroeconomic conditions in its largest economies, which are adjusting to lower commodity revenues,” the IMF said. “These revisions for the largest low-income country are the main reason for the downgrade in growth prospects for the low-income developing countries group.”

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